4Q09 Results. Presentation. Rio de Janeiro, February 24 th TIM PARTICIPAÇÕES S.A. Investors Relations

Transcription

1 4Q09 Results Presentation Rio de Janeiro, February 24 th 200

2 Additional Disclaimer to the Presentation In the following slides we will present the financial statement analysis. For the sake of simplicity, all comparisons refer to TIM operations, excluding the effects of Intelig s Dec/09 operations. As for the Balance Sheet, the analysis includes Intelig.

3 Agenda Repositioning Track 4Q 2009 Results Perspectives for

4 TIM Brasil: Repositioning Track MM lines, EoP Post-paid Base Pre-paid Base 3 Waves of Development FROM REPOSITIO- NING TO GROWTH After 5 months, discontinuation of the post-paid base erosion Reversal of Pre-paid clients loss after repricing/promo Penetration Usage Data Jan-08 Jan-09 Abr-09 Aug-09 Dec-09 Jan-09 Mar-09 Aug-09 Dec Difficulties 2009 Repositioning Growth 200 TRACK Uncompetitive offer: repricing and promo stop Loss of Brand attributes Little innovation Loss of quality Offers innovation: breaking the rules Quality Recovery Efficiency Plan: Savings >R$ Billion; (~R$800 Mln on the financials) Intelig Acquisition Main growth drivers: Penetration F-M substitution Internet Need to build own infra-structure / Intelig integration Back to growth with profitability and cash Clients loss Inertia in 2009 of -R$ Bln QoQ Acceleration 3 Waves of Development 3

5 Q4 2009: Visible Signs of Turnaround Customer Base: 4. MM (+.5 MM vs. 3Q) ARPU leader: R$27 (vs. R$26.5 in 3Q) Service Revenues: +5.4% QoQ, due to outgoing traffic (+3% QoQ) Trend Inversion of Service Revenues YoY drop Infinity: ~8 million R$ MM 2,823 Service Revenues 2,936 3, % +5.0% +5.4% 3,248 Q 2Q 3Q 4Q Development Development Profitability EBITDA: R$ 960 MM, +26% QoQ EBITDA Margin: 28.2% (+542 bps QoQ) Operating FCF: R$. Bln 4Q; R$ 0.7 Bln Full Year Net Income: R$ 330 MM, +29% 2009FY vs. 2008FY Intelig Acquisition: completed Quality Quality Network Quality (Anatel Ranking) : 00% in December, with MOU ~ 00 minutes Bad debt represents 2.5% of Service Revenues: -37%YoY Reduction of Interconnection and subsidy costs weight. 0 Anatel Quality 99.5% 97.3% 93.4% 94.0% 20.2% Q 2Q 3Q Oct Nov Dec EBITDA Margin 22.3% 22.7% Q 2Q 3Q 4Q January: 00% 00.0% 97.3% 28.2% 4

6 KPI s Improvements QoQ: Subscriber Base, traffic, ARPU and Revenues CB MOU ARPU MM clients oct nov dec Minutes R$ % +4.7% +3.8% Total Outgoing >40% Outgoing Voice % Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q Q2 Q3 Q4 8 MM Infinity Positive elasticity 2 TIM: breaking the rules Infinity: from charge per minute to charge per call Liberty: Unlimited talk to all TIM community R$ MM 2,823 Service Revenues +4.0% +5.0% +5.4% 3,083 2,936 3, Q Q2 Q3 Q4 Charge 0 per 9 call Charge 5 per 4 minute 3 2 Chip Avulso : without penalty Q Q2 Q3 Q SIM unlock handset YoY -0.5% -.2% -.0% +0.3% 5

7 Reinforcement of Brand Positioning Share of investments TV, % Player Player2 Investments in Advertising 32% 3% 30% 26% 28% 28% 24% 9% 8% 3% 25% 25% Player Clear and direct communication of offers Best deals pp +3pp Cheaper cost per Minute pp -pp Player3 5% 6% 7% 5% Player2 29-5pp 23-8pp Jan-Nov 09 Player3 29-7pp 2-5pp Communication Waves Brand Credibility Coverage Mundo Azul Coverage Innovation 38 +3pp 34 +0pp Player 44 +3pp 28 0pp Liberty Chip Avulso Player2 22 +pp 25-7pp Player3 7-3pp 32-3pp 6

8 Network Quality: 00% of Anatel s targets achieved Increase in Traffic Volume Network quality improvement (Anatel ranking) MM of total minutes (excluding visitors) % achieved goals in TIM s network quality, ,045 7,585 9,973 8,068 0,458 0,4 Traffic reduction after repricing 9, % 85.5% 93.4% 99.5% 98.2% 94.0% 97.8% 97.3% 00.0% 2009 MOU oct nov dec 6000 Q Q2 Q3 Q4 3Q08 4Q08 Q09 2Q09 3Q09 4Q09 YoY -6.% -9.% +0.5% +28.9% 00% of Anatel s Goals in December (confirmed in Jan. 0) 7

9 Agenda Repositioning Track 4Q 2009 Results Perspectives for

10 Main Financials Results Efficiency Plan: R$0.8 Bln in savings, R$ 0.6Bln of which were reinvested in the Re-Launch Plan ( Self-financing ): + R$0.6Bln (+23.4% YoY): advertising, commissions and customer care - R$0.4 Bln (-8.8% YoY): Network and Interconnection Costs - R$0.3Bln (-43.6% YoY) : Bad Debt - R$0.Bln (-9.3% YoY) : Personnel and G&A EBITDA: R$959 million in 4Q09 (+26% QoQ) and a 28.2% margin in the quarter; EBITDA FY2009 of R$3,063 million (+5.6% YoY) and a 23.5% margin (+40 bps vs. 2008) Net Profit: R$232 million in 2009 (+29% YoY) Operational Free Cash Flow: positive in R$,09 million in 4Q09; R$692 million in FY2009 Net Financial Position: R$,684 million (-R$860 million vs. 3Q) including Intelig 9

11 Efficiency Plan for the Business Re-launch %.Net Service Revenues % YoY, Delta (R$MM) EBITDA & Margin R$ Million, % Margin 28.2% Selling expenses 25.% 28.2% 28.3% 27.9% 2.% 22.4% 23.0% 2.9% +R$630MM +23.4% Investment on Relaunching Plan 20.2% 22.3% 22.7% Q 2Q 3Q 4Q Q09 2Q09 3Q09 4Q09 Interconnection & Network 36.8% 36.% 34.6% 32.4% 34.9% 3.4% 3.3% 30.8% -R$372MM 8.8% Quality of traffic (onnettization); structural rethinking Q 2Q 3Q 4Q Structural Improvement of Profitability R$ Million, % Margin 22.% 23.5% Bad Debt 9.6% 6.8% 4.6% 4.0% 4.8% 3.6% 3.2% 2.5% Q 2Q 3Q 4Q -R$327MM -43.6% Quality of customer base; billing and credit management 2,899 3,063 Personnel and G&A Costs 0.% 9.3% 8.2% 8.7% 9.3% 8.6% 8.0% 7.4% -R$02MM -9.3% Lean structure Q 2Q 3Q 4Q

12 Net Result 4Q09 R$ Million ,5 (620,9) -32% 2009 vs to R$252Mn Y/Y variation due to lower impact of tax benefits (R$04Mn vs. R$60Mn) (55,3) 47,8 (44) Q09 (5) 2Q09 3Q09 4Q09 337,6 330,0 EBITDA 4Q09 Depreciation & Amortization EBIT Net Financial Expenses Taxes and Others Net Profit Net Profit 2009FY % 232 Dividends: Proposal of R$ 0,25 per PN in distribution

13 Operational FCF & Net Financial Position 4Q09 (TIM + Intelig Dec/09) Free Operational Cash Flow Net Financial Position R$ Millions R$ Millions R$ 860 Mn debt reduction,49 (996) 32.% of Total Net Revenues, , ,09 - R$ 6 Mn of Intelig acquisition effect,684 EBITDA Δ Working Capital CAPEX Oper. OCF 3Q09 Oper. OCF Non-Oper. OCF 4Q09 Gross Debt R$ 4.2 billion (of which 67% on long term) ~28% of debt is denominated in foreign currency (00% hedged) Average Annual Cost 9.7% in 4Q09 vs.3.2% in 4T08 and 9.7% in 3Q09 2

14 Agenda Repositioning Track 4Q 2009 Results Perspectives for

15 TIM is Ready to Capture Brazilian Market Opportunity Voice is Good Liberty = unlimited on-net calls (F-M substitution) Offers & Promo based on community LD for Fixed: economy and simplicity with Intelig Attack to fixed monthly fee (F-F substitution) Free-net Philosophy Mobile Internet Access (microbrowsing) Selective growth of the mobile connectivity market (web via internet key) Social networking Penetration Usage Data Market share MOU and ARPU Microbrowsing Browsing Breaking Rules Mundo Azul = One national rate (local and LD) Infinity = pay per call Chip only = exit from handset subsidy market SIM-unlock = free handset Convergence Integrated Solutions of Fixed, Mobile, Voice and Data for: - corporate segment - consumer (selective) 4

16 Developing Own Infrastructure Intelig s backhauling ring 2 Integrated TIM-Intelig 3 connection/strengthening Backbone Development of own metro rings Backhauling Backbone Metro Key actions 4 Microwaves installation PoP Node-B PoP BTS Leased lines 5 BTS Backbone Integration Connection with Intelig MAN MAN TIM conclusion Development of Microwaves and Backhauling - radio 3G/HSDPA Access 2G/Edge Access 2G/Edge Access 5 Leased lines renegotiation with OLO s Increase capacity of infrastructure 5

17 Conclusion: TIM - market s #2 player with the greatest speed of QoQ growth KPI s Size (Q4) Rank* QoQ Growth Subscriber base 4. MM (23.6% Market Share) #3 In Bps MM lines vs. Q, besides having rigorous clean-up to save Fistel ARPU R$ 27.0 # Stop ARPU erosion due to outgoing calls Net Service Revenues R$ 3,248 MM # Higher growth QoQ due to push on voice EBITDA Margin EBITDA R$ 959 MM 28.2% #2 # ,630 Filling the gap vs. market leader besides the intense commercial effort We are ready for the next step, where we ll focus on the capture of opportunities: Penetration: fresh market from social inclusion F-M substitution for Voice Selective growth for Data Option Value Intelig: LD for Fixed and Convergence * Without considering Oi s results (not published yet) 6

18 Safe Harbor Statements Statements in this presentation, as well as oral statements made by the management of TIM Participações S.A. (the Company, or TIM ), that are not historical fact constitute forward looking statements that involve factors that could cause the actual results of the Company to differ materially from historical results or from any results expressed or implied by such forward looking statements. The Company cautions users of this presentation not to place undue reliance on forward looking statements, which may be based on assumptions and anticipated events that do not materialize. Investor Relations Avenida das Américas, Bloco 0 6 andar Barra da Tijuca Rio de Janeiro, RJ Phone: / / Fax: Visit our Website 7